ECON102 2023: CLASS EXERCISE 4

Short Ques+ons:

1. Real variables like RGDP, employment, & the real wage rate(w) describe?

2. Nominal variables like the P & money wage rate tell us?

3. Explain the concept of full employment?

4. Explain the difference between the natural rate of unemployment and cyclical
unemployment?

5. Draw and label the labor market diagram (show the labor demand and supply curves).
What does the labor market equilibrium determine? Explain the labor market
equilibrium in the context of the aggregate produc+on func+on.

6. Explain the three condi+ons that determine labour produc+vity growth? Use
examples in your response.

7. Name and explain the three main measures of money in South Africa today are
known as?

MCQ Q ues+ons:

8. If the real wage rate is R400 and the nominal wage rate is R8000, the price level is:
A. R20.
B. R8000.
C. R0.05.
D. R3 200 000.
E. R1.

9. The aggregate production function is concave because ___________.

A. of decreasing returns to labour, as labour hours are not equally produc+ve
B. of increasing returns to labour, as labour hours are not equally produc+ve
C. the opportunity cost of labour is zero
D. the marginal product of labour is constant
E. the opportunity cost of labour is constant
10. Which of the following is an example of using money as a store of value?
A. Paying for a computer with a government bond.
B. Paying rent with a cheque on a demand deposit.
C. Keeping R200 on hand for an emergency.
D. Paying for a new dress with a credit card.
E. Paying cash for a new automobile.